Further to our March 19, 2010 post, on March 31, 2010, ALJ Carl C. Charneski issued the public version of the Enforcement Initial Determination (“EID”) (dated March 18, 2010) in Certain Voltage Regulators, Components Thereof, and Products Containing Same (Inv. No. 337-TA-564).  In the EID, ALJ Charneski found that a violation had occurred of the ITC’s limited exclusion order (“LEO”) and recommended that a cease-and-desist order issue against Respondent Advanced Analogic Technologies, Inc. (“AATI”).

By way of background, the ITC issued its Final Determination on September 24, 2007 finding that a representative AATI voltage regulator infringed claims 2, 3 and 34 of Complainant Linear Technology Corporation’s (“Linear”) U.S. Patent No. 6,580,258 (the ‘258 patent).  The ITC issued an LEO directed to AATI with respect to voltage regulators covered by the asserted claims.  Linear thereafter filed a complaint requesting that the ITC institute a formal enforcement proceeding against AATI for alleged violation of the LEO.  On October 1, 2008, the ITC issued a Notice of Institution of Formal Enforcement Proceeding.  A tutorial was held in the enforcement proceeding on January 5 and an evidentiary hearing was held on January 11-13, 2010.

The only claim term in dispute in the enforcement proceeding is the word “OFF” that appears in claims 2 and 34 of the ‘258 patent.  Linear and the Commission Investigative Staff (“OUII”) argued that the plain and ordinary meaning of the term in the context of the patent is “driven to conduct only an insignificant amount of current.”  AATI proposed that the term should be construed to mean “rendered non-conducting,” and further argued that Linear should be prevented from asserting that “OFF” has a meaning contrary to that which Linear argued to the Federal Circuit in litigation involving a related patent under the equitable doctrine of judicial estoppel.  ALJ Charneski rejected AATI’s judicial estoppel argument, stating that AATI had not shown that Linear’s earlier representations are inconsistent with its current arguments, and adopted the construction proposed by Linear and OUII.

Linear accused AATI of direct infringement of claims 2 and 34 of the ‘258 patent, as well as induced and contributory infringement, and alleged that the importation, sale for importation, or sale after importation of the accused products violated the LEO issued in the underlying investigation.  Linear accused a number of AATI voltage regulators, of which the parties stipulated that the AAT2158 is representative.  ALJ Charneski’s infringement analysis focused primarily on whether transistors in the accused products turn “OFF” in accordance with claims 2 and 34.

In the EID, ALJ Charneski found that the accused products literally infringe the asserted claims because their drive circuitry causes at least one of the transistors to enter a high impedance state by biasing the transistor at a non-zero gate-to-source voltage of approximately 560 millivolts, which is too small to create a significant inversion layer within the transistor, and so current flow is restricted to the “insignificant” amount of 20 microamps or less, which is indicative of a transistor in the claimed OFF state.  ALJ Charneski further found that if “OFF” were construed to mean “non-conducting” such that an “insignificant” amount of current flow was deemed outside the literal scope of the claims, the accused products would nonetheless infringe under the doctrine of equivalents because the differences between the accused products and the claimed invention would be insubstantial.

ALJ Charneski also found in the EID that AATI induced infringement based on its instructions to customers to use the imported accused products in ways that infringe the asserted claims, and that there is strong circumstantial evidence that such infringement by end users occurs.  For example, AATI created datasheets and demo boards for each accused product to teach customers how the products work and how to configure them with external components, such as external capacitors required to use the products in an infringing manner.  With respect to the intent required for induced infringement, ALJ Charneski observed that AATI has been on notice of its infringing activities at least since Linear filed its complaint in the underlying investigation in February 2006, and that despite the ITC’s and the Federal Circuit’s findings of infringement, AATI continued to provide datasheets and demo boards to customers in order to induce others to infringe.  ALJ Charneski also noted that AATI did not produce an opinion of counsel on non-infringement, which is a factor indicating the requisite intent.

With respect to contributory infringement, ALJ Charneski found in the EID that the accused products are not staples of commerce and that they lack any substantial non-infringing use.

Linear and OUII argued that AATI should be barred from raising invalidity in the enforcement proceeding under principles of res judicata.  ALJ Charneski disagreed, finding that AATI was entitled to argue that Linear’s claim construction would render the asserted claims invalid because the term “OFF” was not an issue in earlier proceedings, and it is only because Linear has accused a new set of products in the enforcement proceeding that the term “OFF” must now be construed in order to address AATI’s non-infringement assertions.

AATI raised indefiniteness and lack of enablement as grounds for invalidity if the ALJ adopted Linear’s and OUII’s proposed claim construction.  With respect to indefiniteness, AATI argued that the asserted claims are invalid because “a person of skill in the art would not be able to determine the boundary between ‘insignificant’ and ‘not significant’ current,” and because the term “insignificant” is inherently vague.  ALJ Charneski disagreed on the grounds that (1) the term “insignificant,” as well as an example of insignificant current, is contained in the specification of U.S. Patent No. 5,408,150 (the ‘150 patent), which AATI’s expert did not include in his opinion on claim construction even though the ‘105 patent is incorporated in its entirety into the ‘258 specification; and (2) a determination of whether a current is insignificant within the context of the asserted claims is not defined numerically, but by the operation of a circuit and the characteristics of the transistors used therein.

Regarding lack of enablement, AATI argued that the asserted claims are invalid because “a person of ordinary skill in the art would not be able to practice the full scope of those claims without undue experimentation” because “the ‘258 patent does not teach a person of ordinary skill in the art how to build a switching voltage regulator in which one transistor remains conducting in the second state of circuit operation, or in which one transistor is maintained at an immediate gate voltage between VIN and ground.”  ALJ Charneski again disagreed, stating that AATI’s argument is based on its faulty claim construction that does not allow a transistor to be “OFF” if it still conducts some current, unless it is apparently unintended leakage current.

Linear requested the issuance of a cease-and-desist order and modification of the LEO “in any manner that would assist in the prevention of the unfair practices.”  OUII opposed modification of the LEO, but supported the issuance of a cease-and-desist order.  ALJ Charneski did not recommend modifying the LEO, as “it is unclear . . . how any modification to the order would assist in its enforcement.”  ALJ Charneski found that AATI maintained a commercially significant inventory based on AATI’s stipulation that its domestic inventory at the time of the hearing consisted of approximately 5,800 sample stock, 75,000 engineering parts and 45 engineering semiconductor wafers, coupled with the fact that some products subject to the LEO ship first to AATI in the United States for further distribution (e.g., one shipment originating from AATI in California contained approximately 33,000 demo boards and 1,000,000 finished parts from a family of products that were the subject of the underlying investigation).  Accordingly, ALJ Charneski recommended the issuance of a cease-and-desist order that extends to all products covered by the LEO.